Boulder staff analysis: Closing airport, selling land could inject $400M into city coffers

BOULDER — Closing the Boulder Municipal Airport in 2041 — the earliest the facility could be shuttered while upholding city obligations to the Federal Aviation Administration — and selling off the public land to developers could result in a $400 million windfall for the city, Boulder staffers have determined in a financial analysis that’s expected to be provided to Boulder City Council members on Thursday. 

The analysis was developed over the last year or so as Boulder officials, residents, business leaders, housing advocates and aviators have grappled with pros and cons of decommissioning the Boulder Municipal Airport, or BDU. 

In late June, a pair of separate but complementary petitions — Repurpose Our Runways and Runways to Neighborhoods — received enough signatures to potentially appear on the November ballot. 

Housing advocates, including petition organizers with Airport Neighborhood Campaign, argue that decommissioning the airport would offer a once-in-a-lifetime opportunity to provide below-market housing that’s accessible to the type of middle-class worker who can’t afford a million-dollar-plus home and doesn’t qualify for traditional subsidized housing.

To achieve this result, the city would sell acreage within the current airport footprint to developers on the cheap, with the pledge that a certain percentage of homes built there would be sold at below-market prices. 

Opponents of decommissioning argue that the proposal isn’t feasible and could prove economically harmful both to businesses and city coffers. 

Boulder Municipal Airport, according to the Colorado Department of Transportation’s 2020 Colorado Aviation Economic Impact Study, the most recent dataset of its kind, supports 299 jobs and is responsible for nearly $97.8 million in total economic impact. That metric includes payroll, business revenues and contributions to gross regional product from both on-site businesses and visitors who travel through BDU.

Decommissioning critics note that the Federal Aviation Administration, which provided the city with grant funds in 1959, 1963 and 1977 to purchase a total of about 44 acres on the airport site, is unlikely to simply rubber-stamp a closure. An attempt to close the airport, they say, will result in a long and expensive legal battle with the federal government.

The FAA’s “policy (is) to strengthen the national airports system and not to support the closure of public airports,” according to a letter to city staff from John Bauer, the FAA’s Denver Airports District manager. “The FAA has rarely approved an application to close a federally obligated airport. Such approvals were granted only in highly unusual circumstances where closing the airport provided a benefit to civil aviation such as funding a replacement airport in the community.”

Supporters of decommissioning counter that the FAA’s interpretation of Boulder’s obligations to the federal government is flawed and argue that a lawsuit won’t be nearly as costly as some fear. 

In recent months, momentum has built for a plan that would see the airport decommissioned for the purpose of building much-needed housing.

The city’s financial analysis compares two scenarios: 

In the first, the Boulder Municipal Airport continues to operate for aviation purposes for the foreseeable future with continued federal funding assistance and increased investment in improvements to maximize operations revenue. Over the next 18 years, Scenario One has associated costs that total $54 million and revenues of $40.4 million (both figures are estimated in 2041 dollars).

The second scenario would have the city reject future grant funding from the FAA, minimize capital improvement spending, close the airport in 2041 and sell the land. Not including the land sale, Scenario Two features 18-year revenue projections of $25.6 million and expenses of $37.3 million.

Here’s how city staff analyzed the land sale piece of the puzzle:

“Using the assumed current market value of $2,000,000/acre, the current value of the entire 176.4 acres of airport property is estimated at $352,800,000 in 2024 dollars. Escalating current values to 2041, the airport could be valued at an estimated $550,247,596 million in 2041,” the Boulder financial analysis report said. “…. After the sale of all airport land at fair market value and reimbursing the FAA for federal grants received to acquire land, the city could realize a positive balance of $400,027,984. The city would likely incur additional costs (not yet calculated in this analysis) to remediate the site for any potential future use.”

Boulder City Councilman Mark Wallach, a supporter of the airport decommissioning concept, wrote last week on the City Council’s publicly viewable communications platform that “apart from all of the other potential reasons to decommission the airport: noise pollution, lead pollution, the inequities of having the lead pollution primarily impacting our adjacent manufactured home communities, and the need for the middle-market housing this land could create, the bottom line is that recovering this property makes compelling financial sense.”

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